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Distributor Tool — Net Margin Calculator
Distributor Margin Calculator — Know Your Real Net Margin After All Costs
Calculate net distribution margin after accounting for purchase price, company schemes, freight, retailer discounts, and operating costs. The true picture of distributor profitability.
Net Profit = ₹87.15 − ₹78 = ₹9.15/unit | Net Margin = ₹9.15 ÷ ₹95 × 100 = 9.63%
When to Use This Calculator
Evaluate a new distribution appointment before accepting it
Compare profitability across different brands and product lines
Decide how much retailer scheme you can offer without losing money
Present business case to company for better distributor margin
Plan route-wise profitability by comparing delivery cost impact
Frequently Asked Questions
Distributor margin is the profit percentage a distributor earns between the price they buy goods from the manufacturer (purchase price) and the price they sell to retailers (billing price).
Distributor margins vary by category: FMCG 5–10%, Pharma 8–12%, Electronic goods 5–8%, Garments 10–20%. Effective margin after scheme discounts and freight may differ.
Schemes given by companies (cash discount, quantity discount) increase the effective margin. Schemes offered to retailers (retailer schemes) reduce your effective margin.
Primary margin is what you earn buying from the manufacturer. Secondary margin is what you earn selling to retailers. Total distribution profitability depends on both.
Freight cost reduces your effective margin. Include inward freight in your landed cost and outward freight as an operating cost to get true profitability.
